Frequently Asked Procurement Questions

Per 2 CFR, 200.318(c)(1-2) A code of conduct is a written policy that governs standards of conduct and conflicts of interest for employees engaged in the selection, awards, and administration of contracts. A code of conduct is required for all recipients and subrecipients of federal awards.

If the recipient or subrecipient has a parent, affiliate, or subsidiary organization that is not a State, local government, or Indian Tribe, the recipient or subrecipient must also maintain written standards of conduct covering organizational conflicts of interest. Organizational conflicts of interest mean that because of relationships with a parent company, affiliate, or subsidiary organization, the recipient or subrecipient is unable or appears to be unable to be impartial in conducting a procurement action involving a related organization.

Per 2 CFR, Section 200.318(c)(1), The recipient or subrecipient must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. An employee, officer, and board member of the agency may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors. However, the agency may set standards for situations where financial interest is not substantial or a gift is an unsolicited item of nominal value. In California, the Political Reform Act (California GC, sections 87000 et. seq.), and California GC, sections 1090 et. seq., govern conflicts of interest. Additionally, local conflict of interest rules may also apply.

Per 2 CFR, Part 200.318, The recipient or subrecipient must maintain written code of conduct standards for those who participate in the selection, award, or administration of a contracts. School board members with decision-making authority regarding the expenditure of federal funds should be included in the agency’s written code of conduct. While there is not an explicit requirement for board approval of the code of conduct, it is a best practice to obtain board approval if members of the school board are included in the code of conduct.

Agencies should consult with their legal counsel when they think an instance of unethical conduct occurs during a solicitation.

Section 200.318(k) of 2 CFR, states in part:

The recipient or subrecipient is responsible, for the settlement of all contractual and administrative issues arising out of its procurement transactions. [Procurements should always comply with 2 CFR, Section 200.319—Competition] Violations of law must be reported to the Federal, State, or local authority with proper jurisdiction.

Court decisions have found contracts made in violation of California GC, Section 1090 were void.

Per 2 CFR, Section 200.318(c)(1) No employee, officer, agent, or board member with a real or apparent conflict of interest may participate in the selection, award, or administration of contract supported by the Federal award.

The Political Reform Act, (California GC, sections 87100 et. seq.), and California GC, sections 1090 et. seq., provides information for public officers and employees on prohibitions applicable to specified officers and employees.

Ultimately, it is the responsibility of the CNP Operator to determine who must adhere to the code of conduct.

The code of conduct document must include several components:

• Conflicts of Interest: Define a conflict of interest and ensure staff with a conflict of interest do not participate in contract-related activities
• Disciplinary action: Include disciplinary action for code of conduct violations
• Gratuities, favors, and gifts: Ensure applicable staff do not solicit gifts from contractors and address whether staff are allowed to accept gifts of nominal value or not. If gifts are allowed, the code of conduct must include the nominal value

The code of conduct document may contain additional components, depending on the type and structure of the CNP Operator:

• Organizational conflicts of interest: This ensures the ability of the CNP Operator to be impartial if conducting a procurement transaction involving a related organization
• Statement of Economic Interest: This ensures that public employees who make or influence governmental decisions submit a Statement of Economic Interest, Form 700, when required

CNP Operators that need assistance writing the Code of Conduct can access the Code of Conduct Sample in CNIPS, Download Forms, Form ID PRU 08a.

Per 2 CFR 200.318(a) The recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in 200.317 through 200.327.

Procedures specify the step-by-step instructions of how an CNP Operator purchases goods and services. These procedures should be tailored to the specific needs of the CNP Operator and outline the entire procurement process. A newly hired employee should be able to read, understand, and perform the necessary steps involved in procurement based on these procedures.

CNP Operators that need assistance writing the Procurement Procedures can access the Procurement Procedures Sample in CNIPS, Download Forms, Form ID PRU 08b.

Per 2 CFR 200.320(a)(1) A micropurchase is the aggregate amount of the procurement transaction which does not exceed the micropurchase threshold of $10,000 or up to $50,000 with a self-certification. Micropurchases may be awarded without soliciting competitive price or rate quotations if the recipient or subrecipient considers the price to be reasonable based on research, experience, purchase history or other information and maintains documents to support its conclusion.

Use of the micropurchase method is allowable under the following conditions:

• The aggregate amount of the procurement transaction does not exceed the micropurchase threshold of $10,000. CNP Operators have the option to establish a threshold up to $50,000 with self-certification.
• The CNP operator making the purchase considers that the price they are paying is reasonable based on research, experience, purchase history, or other information; and maintains documents to support its conclusion.

CNP Operators using the micropurchase method may not always purchase from only one source; rather, to the maximum extent practicable should distribute equitably among qualified suppliers.

The micropurchase threshold may not be used in lieu of applicable procurement methods that may achieve a more economical approach. For more information, see “What is bid splitting?” under the General Procurement section.

To increase the threshold, CNP Operators must follow the self-certification requirements below.

CNP Operators may self-certify a threshold up to $50,000 on an annual basis.

The self-certification must include a justification, clear identification indication of the threshold, and supporting documentation of any of the following:

• A qualification as a low-risk auditee, in accordance with the criteria in 2 CFR 200.520 for the most recent audit;
• An annual internal institutional risk assessment to identify, mitigate, and manage financial risks; or
• For public institutions, a higher threshold consistent with State law.
  

Per 2 CFR 200.320(a)(1) CNP Operators using the micropurchase method may not always purchase from only one source; rather, to the extent practicable should distribute micropurchases equitably among qualified suppliers. This provides qualified suppliers the opportunity for business or "spreading the wealth".

Schools in rural areas are still required to perform open and free competition. If only one store is within a reasonable distance to purchase goods, then it might be more advantageous to perform a simplified acquisition purchase, join a cooperative, piggyback off another district's contract or inter-agency agreement.

Note: For simplified acquisitions, sometimes schools are unable to find two or more sources that meet their specifications. In such cases, the school must document why it was unable to find two or more quotes and make note of any efforts taken to broaden the specifications in order to get more quotes.

Per 2 CFR 200.320(a)(2) Each CNP Operator needs to determine whether they must adhere to the federal simplified acquisition threshold of $250,000 or a more restrictive simplified acquisition threshold set by their agency/district or local government. The simplified acquisition threshold is per contract cost. A CNP Operator cannot deliberately split transactions into amounts below the simplified acquisition threshold to circumvent using the formal procurement method.

Per 2 CFR 200.320(a)(2) Recordkeeping is essential when using either the informal or formal procurement method. Although issuing a written solicitation is not required when using the simplified acquisition, it is important to write down specifications and other requirements to ensure each potential vendor receives the same information.

With all bids, proposals, and solicitation documents, recordkeeping ensures that communication with vendors is documented, regardless of how the communication took place (e.g. in person, via email, or over the phone). Some schools may operate completely via email and create an email folder with each offer. Others may prefer hard copies and keep physical files of all specifications and solicitations. Keep information for each procurement together in one place for easy reference.

Per 2 CFR, Section 200.318(i), The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction.

For more information, refer to the Procuring Local Guide: Informal and Formal Procurement Methods section, see page 44 in the USDA Procuring Local Food for CNPs Guide located on the USDA Farm2School web page .

Yes, schools must document each stage of the evaluation process and who conducted the evaluation. Although schools may not always be asked to justify their evaluation and awarding of a contract by providing documentation, they must still keep records showing their objective evaluation criteria and selection process. If a vendor protests the awarding of a contract, the school should be prepared to respond with this information within 30 days.

For an example of evaluation criteria, see Table 3 on page 45 and Appendix U on page 149 in the Procuring Local Food for CNPs guide located on the USDA Farm2School web page .

Per CFR 200.320(a)(2) Even though simplified acquisitions are less rigorous, it is important to note that competition is still required, and the regulations must be followed. Schools must acquire bids from two or more vendors. Although bids might be received via email, over the phone or face-to-face, schools should document all bids. The award is made to the responsive and responsible bidder with the lowest price.

The five basic steps when making a simplified acquisition:

1. Develop specifications, terms, and conditions: Detail the requirements of the intended agreement, including delivery and packing conditions.
2. Identify qualified suppliers: Contact potential vendors in a variety of ways and gather two or more quotes.
3. Evaluate quotes: Ensure that responders are responsible and responsive in accordance with all aspects of the specifications. Document each quote even if it was offered in a face-to-face meeting.
4. Make the purchase: Determine which bidders is responsive and responsible with the lowest price and make the purchase and retain all documentation.
5. Monitor contractor: Ensure the school receives everything from the vendor that the contract stipulates.

Note: Sometimes, schools are unable to find two or more sources that meet their specifications. In such cases, the school must document why it was unable to find two or more quotes and make note of any efforts taken to broaden the specifications in order to get more quotes.

For more information, refer to the Procuring Local Guide: Informal and Formal Procurement Methods section, see page 42-43 in the USDA Procuring Local Food for CNPs Guide located on the USDA Farm2School web page .

1. Develop a written solicitation that contains the scope of work (SOW) or specifications, instructions for vendors, and the general terms and conditions of the procurement. Must include the SOW and sample contract. Include details such as estimated quantity required, delivery needs, packing conditions. If purchasing food, include the Buy American provision and geographic preference (if applicable).
   
   
2. Publicly advertise the solicitation in a newspaper of general circulation in the district one week apart for two weeks per PCC 20112. May also advertise online.
   
   
3. Establish a date and time for opening of proposals/bids. (IFBs must be publicly opened at time and place prescribed in the solicitation for local governments).
   
   
4. Evaluate the bids/proposals received.
   
   
5. Award the contract to the lowest responsive bid and responsible bidder (IFB) or responsible offeror whose proposal is most advantageous to the recipient or subrecipient considering price and other factors. (RFP)
   
   
6. Monitor contract to ensure you receive everything the contract stipulates from the vendor.

For more information, refer to the Procuring Local Guide: Informal and Formal Procurement Methods section, see page 45-46 in the USDA Procuring Local Food for CNPs Guide located on the USDA Farm2School web page .

No, Per 2 CFR 200.320(b)(1)(2), contracts must be awarded to the lowest responsive bid and responsible bidder (IFB) or responsible offeror whose proposal is most advantageous to the recipient or subrecipient considering price and other factors. (RFP). Taste test requirements should be announced during the solicitation process and used as part of the scoring criteria during evaluation.

Yes, Per 2 CFR 200.320(b)(2)(i) request for proposals must be publicized and identify all evaluation factors and their relative importance.

Per 2 CFR 200.320(b)(1)(2), Contracts must be awarded to the lowest responsive bid and responsible bidder (IFB) or responsible offeror whose proposal is most advantageous to the recipient or subrecipient considering price and other factors. (RFP)

Effective January 1, 2018, PCC 20111(c) was amended to require procurement bid solicitations and awards made by a school district approved to operate at least one federal nonprofit child nutrition program for purchases in support of those programs shall be consistent with the federal procurement standards in Sections 200.318 to 200.327, inclusive, of Part 200 of Title 2 of the Code of Federal Regulations. These awards shall be let to the most responsive and responsible party. The price shall be the primary consideration, but not the only determining factor.

• Price: 50 Points
• Product specifications: 20 Points
• Service and deliveries: 10 Points
• Discounts, rebates, and applicable credits: 10 Points
• Overall qualifications: 10 Points

For an example of evaluation criteria on how to award points for price in an RFP, see Appendix J on page 127 and Appendix P on page 140 in the Procuring Local Food for CNPs guide located on the USDA Farm2School web page .

Evaluation criteria will primarily be included in RFP's where proposals will be evaluated on other factors in addition to price. While evaluation criteria can be included in IFBs, the criteria are not weighted and are posed as requirements to determine if vendors are responsive and responsible.

Some of the evaluation criteria are similar to the product specifications and vendor requirements. The weight of the evaluation criteria distinguishes which elements are most important, but it is valuable to note that elements included as evaluation criteria are not requirements. Price does not need to be weighted more than 50 percent, but it should carry more weight than any other criterion.

Ex: A district may decide that providing the state of origin on all products is necessary, so the district includes this element as a vendor requirement which means the vendor must provide this information in order to be considered responsive and responsible. If the school chooses to include that element as an evaluation criterion, it may end up awarding a contact to a bidder that is unable to provide the state of origin because it was given relatively small weight in the evaluation.

For an example of evaluation criteria, see Appendix J on page 127 in the USDA Procuring Local Food for CNPs guide located on the USDA Farm2School web page .

Yes. Solicitations are required to include a clear and accurate description of the technical requirements for the material, product, or service to be procured. If a CNP Operator provides additional information to a potential vendor in order to meet that standard, the CNP Operator must provide the same additional information to all other potential vendors. As a best practice, the CNP Operator may hold a Q&A session for all potential vendors. Afterward, the CNP Operator could post the Q&As on a public portal, such as their web site.

Per 2 CFR 200.319(b)(1) and 200.320(b)(1)(ii)(A), does not define what an adequate or sufficient amount of time is for a vendor to respond to a solicitation. However, not providing an adequate amount of time (minimum 30 days recommended) for a vendor to respond to a solicitation may be considered limiting competition. In order to be fair to potential vendors, CNP Operators could consider conducting market research, such as an RFI, to determine an adequate amount of time to provide a vendor to respond.

No, for school districts, COEs and agencies governed by a school board or COE they must comply with PCC 20112, which states for the purpose of securing bids the governing board of a school district shall publish at least once a week for two weeks in some newspaper of general circulation published in the district, or if there is no such paper, then in some newspaper of general circulation, circulated in the county, and may post on the district’s Web site or through an electronic portal.

Yes, for all other CNP Operators not listed above. The CNP Operator should announce the solicitation in print, such as in the newspaper, websites, etc. As long as the information is made publicly available, you may also contact known bidders.

For more information, refer to the California Legislative Information, Public Contract Code Section 20112 and Procuring Local Guide: Informal and Formal Procurement Methods section, see page 46 in the USDA Procuring Local Food for CNPs Guide located on the USDA Farm2School web page .

Yes, past performance can be used as long as the CNP Operator informs vendors that past performance is one of the evaluation criteria. An evaluation of a vendor ’s past performance can help a CNP Operator determine whether a bidder is responsible.

For an example of how to use past performance as an evaluation criterion, see Appendix J on page 127 USDA Procuring Local Food for CNPs guide located on the USDA Farm2School web page .

CNP Operators are not required to submit their solicitation documents to the CDE for preapproval before advertising and issuing the solicitation if the procurement is not for an FSMC contract.

Per 2 CFR 200.320(c) Noncompetitive procurements occur when a CNP Operator deems that competition is inadequate or impossible. Noncompetitive procurement can only be awarded if one or more of the following circumstances applies:

1. The aggregate amount of the procurement transaction which does not exceed the micro-purchase threshold;
2. The procurement transaction can only be fulfilled by a single source;
3. The public exigency or emergency for the requirement will not permit a delay resulting from providing public notice of a competitive solicitation;
4. The recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity provides written approval; or
5. After soliciting several sources, competition is determined inadequate.

Per 2 CFR 200.320(c)(2) A sole source procurement is a type of noncompetitive procurement often confused with a lack of competition when a CNP Operator receives an inadequate number of responses to the solicitation. Sole source procurements are more likely to occur when a CNP Operator is purchasing cutting-edge technology or highly technical scientific products. In a true sole source situation, conducting a traditional solicitation (simplified acquisition purchase, IFB, or RFP) is a meaningless act because the element of competition will not exist since the product or service is only available from a single source.

The decision that a sole source situation exists must be made by the CNP Operator, not the supplier. While one supplier may offer goods and services that contain features not available from other suppliers, the CNP Operator must be able to document that those specific features are required, not just preferred. Since a sole source procurement takes place without the benefit of competition, a CNP Operator must maintain appropriate documentation that supports its decision.

CNP Operators should be reminded that a sole source situation is a condition of the procurement environment, not a procurement method; the procurement method is noncompetitive. Again, while a supplier can claim its products are the only products available in the marketplace that meet the CNP Operator's needs, the advertisement alone does not make the claim true. Agencies that fail to validate such claims may subsequently enter into improperly procured contracts.

FSMC contract extensions, amendments, and rebids are done on a yearly basis. Per 7 CFR, Section 210.16(d), the contract between a school and the FSMC shall be of a duration of no longer than one year; and options for the yearly renewal of a contract signed after February 16, 1988, may not exceed four additional years. CNP Operators need to obtain preapproval from the CDE in order to extend, amend, or rebid the term(s) of an FSMC contract. Visit the CDE Procurement in SNPs web page and choose the Approval tab for more information on timelines for the rebidding process.

For more information, refer to the California Legislative Information, Public Contract Code Section 20112 and Procuring Local Guide: Informal and Formal Procurement Methods section, see page 46 in the USDA Procuring Local Food for CNPs Guide located on the USDA Farm2School web page .

Meal vendors are companies that prepare and deliver meals for purchase. All meals must meet the federal meal pattern requirements and be ready for service to students. Depending on the time of delivery, CNP Operators may or may not need to reheat the meals. The vendor is required to document meal temperatures at the time they leave the preparation facility and the CNP Operator is required to document meal temperatures at the time of delivery. Meal vendors must also document menu production, maintain standard recipes, and record the number of meals ordered and delivered.

The scope of allowable services provided by meal vendors are:

• Delivering meals
• Cleaning their own equipment used for meal delivery
• Receiving, storing, and using USDA Foods on behalf of the sponsor, provided that the CDE approved the vendor to minimally process USDA Foods and meals are prepared at the vendor’s facilities
• Preparing menus; however, the sponsor must retain control of the School Nutrition Programs (SNP) by ensuring that the menus meet the federal meal pattern requirements for food-based menu planning
• Completing the daily menu production worksheets

Note: If an CNP Operator requires the meal vendor to provide staff to serve the meals, prepare the meals at the CNP Operator’s facility, or other food service activities, the U.S. Department of Agriculture (USDA) considers the vendor an FSMC.

For more information, refer to Management Bulletin: Distinguishing an FSMC From A Vendor.

No, the CDE Nutrition Services Division (NSD) does not currently require preapproval for vended meal contracts. Please note that SFAs must submit a copy of their vended meal contract or contract extension during annual updates in the Child Nutrition Information and Payment System (CNIPS).

For more information, refer to Management Bulletin: Distinguishing an FSMC From A Vendor

If an CNP Operator contracts with an FSMC without obtaining the CDE’s approval, the SFA may be required to:

• Rebid the contract
• Pay the FSMC from a source other than the nonprofit school food service account (cafeteria fund)

If an CNP Operator has a contract for a vended meal, and that contract is determined to be out of compliance or an FSMC contract that was obtained without the CDE’s approval, the CNP Operator may be required to:

• Rebid the contract
• Repay the cafeteria fund from an allowable nonfederal funding source for all costs incurred under the invalid contract
• Pay the FSMC from an allowable nonfederal funding source until the new CDE-approved executed contract is in place

Please note that the CNP Operator may not use the cafeteria fund to reimburse the account used to pay for services the FSMC provided during the invalid contract period. Some contractors may allow an CNP Operator to defer payment until after the contract is approved; however, the CNP Operator cannot use the cafeteria funds to pay the balance due for any FSMC services rendered before the CNP Operator obtained the CDE’s preapproval, and the contract was executed.

For more information, refer to Management Bulletin: Distinguishing an FSMC From A Vendor

Cooperative purchasing occurs when school districts collaborate to purchase products. Some districts are members of relatively informal cooperatives that come together to purchase a few items, and other schools are part of more formal or extensive arrangements in which cooperative purchasing accounts for the majority of their food purchases. When a group of school districts joins forces to procure foods, the districts may reduce their food costs and administrative burdens, while accessing markets or producers they would not be able to access alone. Larger purchases can make vendors aware that schools are a significant market with the potential to contribute substantially to their bottom line.

For more information, refer to the Procuring Local Guide: Special Topics section, see page 79 in the USDA Procuring Local Food for CNPs guide located on the USDA Farm2School web page and USDA Policy Memo SP 05-2017, CACFP 03-2017, SFSP 02-2017, Q&A: Purchasing Goods and Services Using Cooperative Agreements, Agents, and Third-party Services .

Yes, Per USDA Policy Memo SP 05-2017, CACFP 03-2017, SFSP 02-2017, Q&A: Purchasing Goods and Services Using Cooperative Agreements, Agents, and Third-party Services states in part:

A cooperative is not a method of procurement, but rather an agreement to competitively procure goods and services. A cooperative that is comprised solely of Program operators and/or the CNP State agency may procure as a group and must do so in compliance with the procurement standards that apply to the individual Program operator (7 CFR 210.21 and 2 CFR 200.317-200.327). This includes complying with all State and local procurement standards, if more restrictive, and publishing solicitations and contracts with all terms, conditions, required contract provisions, as applicable, and clearly identifies all product descriptions, specifications, and estimated quantities required.

For SFAs purchasing food, the Buy American provision is required to be in the solicitation and contract per 7 CFR 210.21(d). If using a cost-reimbursable contract, all required cost-reimbursable provisions must be present per 7 CFR 210.21(f).

Furthermore, each program operator is responsible for monitoring vendor performance to ensure compliance with all contract provisions. Written agreements delineating roles and responsibilities are encouraged.

Each individual agency operating a CNP involved in a cooperative purchasing group is responsible for ensuring that all procurements are conducted correctly and according to all applicable federal, state, and local regulations, laws, and rules. For example, if twenty agencies form a cooperative with one lead agency, and the lead agency does not follow all federal, state, and local procurement standards when conducting procurements, all twenty agencies may have a finding during their LAPR and/or AR.

For more information refer to the USDA Policy Memo SP 05-2017, CACFP 03-2017, SFSP 02-2017, Q&A: Purchasing Goods and Services Using Cooperative Agreements, Agents, and Third-party Services .

Yes. Per USDA Policy Memo SP 05-2017, CACFP 03-2017, SFSP 02-2017, Q&A: Purchasing Goods and Services Using Cooperative Agreements, Agents, and Third-Party Services, when adding parties to either a fixed-price or cost-reimbursable contract, known as piggybacking, the contract must have been procured in compliance with 2 CFR, sections 200.317–200.327, and applicable program regulations.

Contracted parties considering additional parties, must include a provision allowing "piggybacking" in their contracts in order to avoid creating a material change. If such a provision is not included in the contract and a material change is determined, a new competitive procurement is required.

For a contract containing such provisions, language should be included specifying applicable limitations of the extension (e.g., dollar value or the number of additional parties that may be added). Such contracts should be thoroughly reviewed by members to ensure they meet their needs and conform to all applicable program requirements.

For more information, refer to the USDA Policy Memo SP 05-2017, CACFP 03-2017, SFSP 02-2017, Q&A: Purchasing Goods and Services Using Cooperative Agreements, Agents, and Third-party Services .

Yes, a CNP Operator may include a brand name in the specification but they must also include the language “or equivalent” and describe what constitutes an equivalent product in the specification to ensure that they are not limiting competition. The CNP operator must determine if a vendor's products are equivalent for consideration.

2 CFR, Section 200.319(a-c) states:

All procurement transactions must be conducted in a manner that provides full and open competition and is consistent with the standards of this section and 200.320.

To ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, or invitations for bids must be excluded from competing on those procurements.

Examples of situations that may restrict competition include, but are not limited to:

1. Placing unreasonable requirements on firms in order for them to qualify to do business
2. Requiring unnecessary experience and excessive bonding
3. Noncompetitive pricing practices between firms or between affiliated companies
4. Noncompetitive contracts to consultants that are on retainer contracts
5. Organizational conflicts of interest
6. Specifying only a “brand name” product instead of allowing “an equal” product to be offered and describing the performance or other relevant requirements of the procurement; and
7. Any arbitrary action in the procurement process.

The Buy American Provision requires Program Operators participating in the School Nutrition Programs (SNP) to purchase domestic food products to the maximum extent practicable.

A domestic product is defined as one that is either:

• An unprocessed agricultural commodity grown in the U.S., or
• A processed food product made substantially (over fifty-one percent) from domestically grown ingredients, by weight or volume and processed domestically.
• Fish must meet the following requirements: 1) Farmed fish must be harvested within the U.S. or any territory possession of the U.S.; 2) Wild caught fish must be harvested within the Exclusive Economic Zone of the U.S. or by a U.S. flagged vessel.

Products from U.S. territories—including Guam, American Samoa, the Virgin Islands, Puerto Rico, and the Northern Mariana Islands—are considered domestic for compliance purposes.

All SNP Operators that participate in the National School Lunch Program (NSLP), School Breakfast Program (SBP), Afterschool Meal Supplements (snack), or Seamless Summer Feeding Option must comply with the Buy American requirement.

Yes, there are two.

1. California Food and Agriculture Code (FAC) 58596.3 requires Program Operators that receive $1 million or more in federal SNP reimbursement annually to solicit bids for the purchase of domestic agricultural food products.
2. California Food and Agriculture Code 58595 requires Program Operators to accept a bid or price for that agricultural food product when it is grown in California before accepting a bid or price for a domestic agricultural food product that is grown outside the state.

Both state requirements have exceptions or qualifying criteria. To learn more, please visit the California Department of Education Senate Bill 490 and Assembly Bill 778 web page.

There are two limited exceptions to which non-domestic foods may be purchased:

• The product is listed on the Federal Acquisitions Regulations (FAR) Nonavailable articles list and/or is not produced or manufactured in the U.S. in sufficient and reasonably available quantities of a satisfactory quality; or
• Competitive bids reveal the costs of a domestic product are significantly higher than the non-domestic product.

Exceptions must be tracked and counted toward the non-domestic food purchase threshold.

The non-domestic food cap is a percent limit of non-domestic food costs. The percentage of total cost of non-domestic food exceptions used in a school year, when compared to the total commercial food costs in the same school year, should not exceed the following:

• Beginning in School Year (SY) 2025–26, the non-domestic food purchases cap will be 10 percent.
• Beginning in SY 2028–29, the non-domestic food purchases cap will be 8 percent.
• Beginning in SY 2031–32, the non-domestic food purchases cap will be 5 percent

Yes, Program Operators can submit a temporary Buy American Accommodation Request form for SY 2025-26.

The Federal Acquisition Regulation (FAR) Nonavailable articles list can be found at Title 48, Code of Federal Regulations, Part 25.104. This is the official government regulation that outlines items not reasonably available domestically. It is also available on the Acquisition.gov site. Both sources contain the same information.

Items found on the FAR Nonavailable articles list are exempt from the documentation requirement, but these items must be counted toward the cap on non-domestic purchases.

Yes, the non-domestic food cost cap applies to non-domestic spices, including spices on the FAR Nonavailable articles list. Nondomestic spice purchases should be tracked and included in the calculation to determine a Program Operator’s annual percentage of non-domestic foods purchased.

No, the non-domestic food costs apply to commercial food purchases only and USDA Foods are not considered commercial purchases. USDA Foods should not be included in calculations to determine a Program Operator’s annual percentage of non-domestic foods purchased.

Buy American requirements do not apply to nonprogram foods. However, California still has state laws for domestic and California grown preference.

The California requirements still apply do not distinguish different requirements for nonprogram foods. Therefore, most foods apply to the California requirements. Examples of nonprogram food that fall outside of agricultural food product definition include:

• Bottled water
• Coffee
• Tea
• And flavored beverages not containing fruit or fruit juice

To ensure that you do maintain compliance, Program Operators are encouraged to buy domestic and California grown products when possible.

SNP Operators must include language requiring the purchase of foods that meet the Buy American requirements in all procurement procedures, solicitations, and contracts.

1. SNP Operators must state in their procurement procedures that they will comply with the following:
   • Buy American regulations at Title 7, Code of Federal Regulations (7 CFR), sections 210.21(d) and 220.16(d)
   • Definitions of a domestic commodity
   • Limitations and Exceptions
   • Non-domestic food purchase cap(s)
   • Maintenance of documentation
     
2. SNP Operators must ensure their solicitations and executed contracts contain language requiring vendor compliance with the Buy American Provision. For sample language, SNP Operators may refer to the Sample RFP FSMC Contract available in the CNIPS, Download Forms, Form ID PRU 07.
3. Track exceptions using the optional USDA Buy American Standard Tracking Form to document the use of limited exceptions/non-domestic food purchases and all commercial food costs. The Buy American Standard Tracking Form is available in the CNIPS, Download Forms, Form ID PRU 10.
4. Ensure food products received from vendors are of domestic origin.
5. Retain sufficient records for procurement, food origin, and vendor certifications of domestic items

1. Evaluate receipts, invoices, and product labels to verify that agricultural commodities were 100 percent grown or raised domestically and that agricultural products were 100 percent processed domestically and over fifty-one percent of their agricultural food components/commodities were grown or raised domestically.
2. Obtain a certification from the vendor of all ingredients in the product including the weight or volume and the country of origin of each ingredient, and that processed end products were processed domestically.
3. Perform a periodic review of food in storage facilities and under refrigeration.

The calculation to determine if the product meets the requirement of over 51 percent domestic agricultural commodities must rely on the ingredients that are food components. Foods that are not one of the five components that comprise a reimbursable meal must be disregarded; using these ingredients could unintentionally distort the Buy American Provision ratio.

For example, take the following ingredient list for reconstituted apple juice:

• Fifty percent water from the Sierras (domestic)
• Twenty-five percent of 100 percent apple juice concentrate from Washington (domestic)
• Twenty-five percent of 100 percent apple juice concentrate from Venezuela (nondomestic)

If the SNP Operator included the water in the overall calculation, the calculation is seventy-five percent domestic (fifty percent water plus twenty-five percent juice from Washington). However, this is not how the percentage should be calculated. Q&A No. 1 from USDA Policy Memo SP38-2017 states in part:

When considering juice for example, in order for the product to be considered “domestic” in accordance with the Buy American Provision, the juice must contain over fifty-one percent of the juice or juice concentrate, by volume, from fruits or vegetables grown in the United States. USDA does not consider water – whether tap or bottled – to be a domestically grown agricultural commodity for purposes of this Provision . . . For products procured by SNP Operators to be served in the SNPs, the fruit/vegetable component of the product, by volume, is the agricultural commodity. For fruit/vegetable juices, in order to be considered responsive, the juice provided by a vendor must contain over fifty-one percent of the fruit/vegetable component of the juice, by volume, from U.S. origin.

Because water cannot be included in the equation, the domestic and nondomestic fruit component are both twenty-five percent and therefore the ratio of domestic to nondomestic is a 1:1 ratio, or fifty percent, which does not meet the requirement of over fifty-one percent domestic agricultural commodities.

No. The CN label only provides standardized food crediting information on a product’s label so the SNP Operator can determine contribution toward the meal pattern requirements. The CN label does not serve as verification of a product’s compliance with the Buy American requirements.

SNP Operators can ensure adherence to the Buy American Provision by practicing the following:

• Include the Buy American requirement, limited exceptions, and non-domestic food purchase cap(s) in its documented procurement procedures.
• Include language in the solicitation and contract that requires the use of domestic agricultural commodities and products.
• Retain records documenting any exceptions.
• Monitor delivery invoices and packing receipts to ensure that contractors provide domestic agricultural products and domestic certifications for processed food products.
• Monitor products through a periodic review of storage facilities, freezers, refrigerators, dry storage, and warehouses to ensure the products received are the ones solicited, and awarded, and comply with the Buy American provision.

CNP operators, State agencies purchasing for CNPs, and the USDA Department of Defense Fresh Fruit and Vegetable Program (USDA DoD Fresh) may use local as a specification and continue to set a geographic preference when soliciting or buying unprocessed agricultural products. The implementation date of the final rule provision is July 1, 2024.

CNP operators may now use local (e.g., “locally grown”, “locally raised”, or “locally caught”) as a specification for local unprocessed agricultural products purchased for program meals, snacks, and milk. CNP operators can require that an unprocessed agricultural product be locally grown, raised, or caught to meet the solicitation requirements and remove products or bids that do not meet this standard from consideration.

Additionally, CNP operators may also continue to apply a geographic preference through additional points or credit during evaluation for local unprocessed agricultural products. This memo will now refer to this strategy as a “defined scoring advantage,” to help differentiate between the concept of a geographic preference option and the two strategies that may be used to implement it.

There is no singular definition of local in federal regulations. Therefore, CNP operators may determine the local area associated with geographic preference. Although local may be used in procurement specifications, in accordance with Federal Regulation, 2 CFR 200.319, CNP operators must still ensure full and open competition when procuring goods and services.

Also, California has state laws that require CNP operators to include in solicitations conditions for preference toward domestic products and the acceptance of bids for California agricultural food products. Additional information for the California state requirements can be found at Senate Bill 490 and Assembly Bill 778 web page.

Note: The definition of “local” should not be so restrictive that it interferes with full and open competition

For more information, refer to the Geographic Preference Expansion Related to the Final Rule - Child Nutrition Programs: Meal Patterns Consistent With the 2020-2025 Dietary Guide for Americans

Federal regulations do not prescribe how much preference in the form of points or any other approach a CNP operator may assign to local products. A defined scoring advantage, by its very nature, impacts competition. However, it may have a greater or lesser impact on competition depending on the characteristics of the local market.

CNP operators are encouraged to conduct market research to ensure that the level of preference they give allows an appropriate number of qualified bidders to compete for the contract.

For more information, refer to the USDA Policy Memo SP 24-2024, CACFP 10-2024, SFSP 14-2024, Geographic Preference Option Questions & Answers

A CNP operator may apply the geographic preference option to unprocessed agricultural products that retain their inherent character. The definition for unprocessed agricultural products, and the food handling and processing techniques within it, are found in regulations for each program as defined in 7 CFR Part 210.21(g)(2) for NSLP, 220.16(f)(2) for SBP, 225.17(e)(2) for SFSP. Examples of allowable products include, but are not limited to:

1. Fruits (including sliced, diced, whole raw, dried, or frozen products);
2. Vegetables (including sliced, diced, whole raw, dried, or frozen products);
3. Grains (including quinoa, rice, barley, etc., in whole form and other grains in ground form such as flour);
4. Eggs (including whole, shell);
5. Fish (including whole, form, fillets, or nuggets that contain no additives or fillers);
6. Meats (including fresh or unprocessed frozen products and formed products, such as patties, that contain no additives or fillers);
7. Poultry (including whole, form, or various cuts); and
8. Dairy (includes pasteurized, unflavored).

For more information, refer to the Procuring Local Foods for Child Nutrition Programs and USDA Policy Memo SP 24-2024, CACFP 10-2024, SFSP 14-2024, Geographic Preference Option Questions & Answers

No, CNP operators may only apply the geographic preference option to raw food products that retain their original character (e.g., chopped raw carrots, ground beef, chicken leg quarters, etc.) and are produced (i.e., grown, raised, or caught) within a defined region. However, a CNP operator can use the geographic preference option to purchase raw unprocessed agricultural products (e.g., washed, cut, diced, sliced, frozen, packed) grown in the area the CNP operator defines as local and have the ingredients further processed.

For more information, refer to the Procuring Local Foods for Child Nutrition Programs and USDA Policy Memo SP 24-2024, CACFP 10-2024, SFSP 14-2024, Geographic Preference Option Questions & Answers

All recipients and subrecipients of federal funds must follow the federal procurement standards in 2 CFR 200.317-327 and any state, local and tribal laws and regulations that apply to the Child Nutrition Program.

Effective January 1, 2018, PCC 20111(c) was amended to require procurement bid solicitations and awards made by a school district approved to operate at least one federal nonprofit child nutrition program for purchases in support of those programs shall be consistent with the federal procurement standards in Sections 200.317 to 200.327, inclusive, of Part 200 of Title 2 of the Code of Federal Regulations.

Yes, subject to any applicable statutory and/or regulatory limitations. CNP Operators can extend a contract for up to four years without issuing a new solicitation every year as long as the Base year contract has language stating the number of extensions allowed.

Note: In order to increase the price of the contract in an extension, as a best practice, the CNP Operator may compare it to an index. An example of an index is the Consumer Price Index (CPI), which produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services. Access this information on the Bureau of Labor Statistics CPI Tables web page.

Fixed-price contracts can have price adjustment provisions that are based on a verifiable price index. The price adjustments can take place at contract renewals and with agreement from both parties.

A cost plus fixed-fee contract provides for the reimbursement of allowable costs of goods plus the payment of a fixed fee to the vendor. This is an appropriate type of contract to use when market conditions are such that potential vendors are unwilling to commit to a fixed price for an extended period.

Note: Per 2 CFR, 200.324(c), cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used.

For an example of how to account for fluctuating prices in a contract, see Appendix O on page 138 in the Procuring Local Food for CNPs guide located on the USDA Farm2School web page .

Yes, it is allowable; however, if volume discounts are not part of the solicitation and a respondent indicates that they give volume discounts, then the response may be considered overly responsive. Therefore, it is a best practice for the CNP Operator to include in their solicitation a request for volume discounts. Any volume discounts must be included in the contract and the contract must specify that the discounts must be returned to the nonprofit food service account.

Yes, small districts or schools in rural areas are still required to perform open and free competition per 2 CFR, 200.319(a). If only one store within a reasonable distance to purchase goods, then it might be more advantageous to perform a simplified acquisition purchase, join a cooperative, piggyback off another district's contract or inter-agency agreement.

CNP Operators using the micropurchase method may not always purchase from only one source; rather, to the extent practicable should distribute micropurchases among qualified suppliers. This provides qualified suppliers the opportunity for business or "spreading the wealth".

Note: For simplified acquisition purchases, sometimes schools are unable to find two or more sources that meet their specifications. In such cases, the school must document why it was unable to find two or more quotes and make note of any efforts taken to broaden the specifications in order to get more quotes.

No, Per 2 CFR 200.319(a)(b) and 200.320 all procurement transactions under the Federal award must be conducted in a manner that provides full and open competition and is consistent with the standards. When a CNP Operator's contract expires, the CNP Operator must once again competitively procure goods or services using proper procurement procedures and methods unless the previous contract included language allowing a contract extension.

Bid splitting is intentionally dividing purchasing to avoid getting price quotes or going out to bid using a more formal procurement method.

Per Public Contract Code 20116, It shall be unlawful to split or separate into smaller work orders or projects any work, project, service, or purchase for the purpose of evading the provisions of this article requiring contracting after competitive bidding.

No, Per PCC 20111(c) Procurement bid solicitations and awards made by a school district approved to operate at least one federal nonprofit child nutrition program for purchases in support of those programs shall be consistent with the federal procurement standards in Sections 200.317 to 200.327, inclusive, of Part 200 of Title 2 of the Code of Federal Regulations. These awards shall be let to the most responsive and responsible party. The price shall be the primary consideration, but not the only determining factor.

Any perishable foods or seasonable commodities noncompetitively procured under the authority of EC Section 38083 will result in disallowance of the purchase(s) and the local educational agency will be required to repay the nonprofit school food service account from an allowable nonfederal funding source.

For more information, refer to the California Legislative Information, Public Contract Code Section 20111(c) and Management Bulletin (CNP-05-2018): Perishable Foods in Child Nutrition Programs.

No, Per 2 CFR 200.319(b) To ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, or invitations for bids must be excluded from competing on those procurements.

Any contract where the contractor participated in developing any part of the bid documents or contract, the CDE will require the CNP Operator to:

• Rebid the contract
• Repay the cafeteria fund from an allowable nonfederal funding source for all costs incurred under the invalid contract

A material change is any change made to a contract after it has been awarded that alters the terms and conditions of that contract substantially enough that had other respondents known of these changes in advance, they could have bid differently and more competitively.

This means that when a school food authority agrees to or allows a winning bidder to make changes to contract terms (including the terms of a contract renewal) that are materially inconsistent with the underlying solicitation document, the school food authority has subverted full and open competition by denying all bidders the opportunity to compete under the same terms and conditions. In this situation, the CNP Operator must re-bid the contract.

Again, contracts may contain language permitting the CNP Operator and vendor to examine and renegotiate payment terms as long as scope and contract modification do not create a material change. Any methods, frequency and basis for fee adjustment upon renewal must be addressed in the original solicitation and contract. The basis must be specified on a standard index, such as the Consumer Price Index for All Urban Consumers.

Contract modifications are subject to a cost or price analysis found in 2 CFR 200.324(a). The recipient or subrecipient must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. Once the cost or price analysis is obtained, the CNP Operators legal counsel may determine if the change is material.

For more information, refer to USDA Memo SP 40-2016, CACFP 12-2016, SFSP 14-2016, Updated Guidance: Contracting with Food Service Management - Guidance for SFA's Renewals/amendments section , see page 60.

Per 2 CFR 200.318(b) Recipients and subrecipients must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. See also 200.501(h).

Schools must monitor all contractors to ensure they stay accountable and compliant before approving payment. Ensure the vendor is meeting the Buy American provision and providing only domestic products. If the school’s needs change, obtain legal counsel to determine necessary steps including conducting a cost-price analysis. If the vendor is unable to fulfill the contract, termination must be made as outlined in the terms and conditions of the contract. It would be unfair and noncompliant with procurement regulations to allow the vendor to make a significant change to the offer without allowing all vendors an opportunity to offer new proposals or bids based on the new requirements.

For more information, refer to the Procuring Local Guide: Informal and Formal Procurement Methods section, see page 48 in the USDA Procuring Local Food for CNPs Guide located on the USDA Farm2School web page .

The CDE will notify CNP Operators that they are scheduled for an off-site procurement review in May prior to the scheduled procurement review year.

The VPL is a list of all vendors paid by the CNP Operator using cafeteria funds during the school year under review.
Note: The list should only include vendors paid using cafeteria funds.

For more information, please locate in CNIPS, Download Forms, Form ID PRU 02 Vendor Paid List Instr.

Yes, per 2 CFR 200.318(a) no matter how large or small the recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in 200.317 through 200.327.

Yes, per 2 CFR 200.318(c)(1-2) the recipient or subrecipient must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. The recipient’s or subrecipient’s standards of conduct must also provide for disciplinary actions to be applied for violations by its employees, officers, agents, or board members. If the recipient or subrecipient has a parent, affiliate, or subsidiary organization that is not a State, local government, or Indian Tribe, the recipient or subrecipient must also maintain written standards of conduct covering organizational conflicts of interest.

No. The CNP Operator, not the FSMC, is responsible for completing and submitting the SFA Procurement Table and Vendor Paid List documents to the CDE. The expectation of the CDE is that CNP Operators will complete the required documents and submit these documents to the CDE prior to any established and communicated deadline.

No. The CNP Operator does not need to list all of the subcontractors that the FSMC uses in the SFA Procurement Table. The CNP Operator is required to include the FSMC and all other procurements conducted by the CNP operator in the table.